IRS Expands Fast-Track Audit Program for SMBs

The IRS is expanding a program that works to provide a shorter, more streamlined audit process for small businesses.

This week, the IRS announced it would be expanding its Fast Track Settlement (FTS) program nationwide; the program uses alternative mediation to avoid formal appeals or lengthy litigations, which can take months, if not years. FTS was first introduced in 2006 as a pilot program in Chicago, Houston and St. Paul; in 2007, it was expanded to Philadelphia, central New Jersey and parts of California.

Under the FTS program, disputes are mediated by appeals officers. The IRS announcement said that most audit issues can be resolved within 60 days using this type of alternative mediation.

“It’s an opportunity to try to resolve issues in a much quicker and better fashion and get on with running the business,” says Daniel J. Glassman, a tax attorney with the law firm Gunster. Glassman says it’s especially useful in cases where business owners feel that the IRS agent has taken an unreasonable or aggressive position.

“It could be helpful to have the appeals officer involved to explain to the agent that there’s a lot of issues,” says Glassman.

Glassman says there’s no real downside to participating in the FTS program.

“It doesn’t in any way alter the taxpayer’s rights to a full appeal or challenge in tax court,” says Glassman.